Shin Kong Financial : Press release SKFH plans to launch long-term capital raising plan (private placement)

Company code:2888 No:1

Subject :SKFH plans to launch long-term capital raising plan (private placement) To which item it meets--article 4 paragraph xx: 11

Date of events: 2024/04/26 Contents:

1. Date of the board of directors resolution: 2024/04/26
2. Types of securities privately placed: Common shares or preferred shares issued through private placement.
3. Counterparties for private placement and their relationship with the Company: The specific person must meet the eligibility requirements of Article 43-6 of the Securities and Exchange Act. Large domestic or foreign institutions will be given priority in order to develop stable and long-term partnership with strategic investors, enhance the Company's market competitiveness through capital participation, business cooperation and experience exchange.
4. Number of shares or bonds privately placed: The number of shares issued through private placement will be no more than 1.5 billion as a principle.
5. Amount limit of the private placement: The number of shares issued through private placement will be no more than 1.5 billion as a principle.
6. Pricing basis of private placement and its reasonableness:
7. 1. According to relevant laws and regulations, the price of the common shares subscribed through private placement shall be no less than 80% of the higher of the following reference prices:
   2. 1. The simple arithmetical average closing price of the common shares for either one, three or five business days before the pricing date, after adjustment for any distribution of stock dividends, cash dividends or capital reduction.
      2. The simple arithmetical average closing price of the common shares for the 30 business days before the pricing date, after adjustment for any distribution of stock dividends, cash dividends, or capital reduction.
   3. The price of preferred shares to be subscribed through private placement shall not be lower than 80% of the theoretical price in accordance with relevant laws and regulations and the Company's Articles of Incorporation.
   4. The private placement pricing is according to relevant laws and regulations and with reference to recent market prices. Also, the rights and obligations of privately placed preferred shares are according to the Company's articles of incorporation. The above provides an overall explanation of the reasonableness of the pricing and terms set for the private placement.

D. The Board will be authorized to determine the actual price within the aforementioned range, according to market conditions and relevant domestic laws and regulations.

1. Use of the funds raised in this private placement: The funds from the private placement are
   expected to be used for one or more of the following purposes: fund working capital, stabilize financial structure, improve capital adequacy ratio, repay loans, or meet the Company's long-term strategic development needs.
2. Reason for conducting non-public offering: Private placement allows strategic partners to acquire the Company's shares in one transaction, which will facilitate the Company's acquisition of the funds, skills, experience, and channels of the strategic partners. Given the securities acquired through private placement are not freely transferable for three years, long-term partnership between the Company and strategic investors is further ensured. Moreover, conducting a private placement can maintain stability of the Company's share price.
3. Objections or qualified opinions from independent directors: None
4. Actual price determination date: To be decided.
5. Reference price: To be decided.
6. Actual private placement price, and conversion or subscription price: To be decided.
7. Rights and obligations of these new shares privately placed:
8. 1. The rights and obligations of the newly issued common shares are the same as the existing common shares.
   2. The rights and obligations of the Company's newly issued preferred shares C are as below:
   3. 1. If the Company has a surplus after the year-end final accounts, it should first pay taxes and make up the losses accumulated from preceding years. After setting aside the legal reserve and setting aside or reversing the special reserve as required by law, if there is any remaining balance, it may first distribute preferred share dividends of the year.
      2. The dividend rate is capped at 8%, per annum on the issue price per share. Cash dividend is paid annually at one time, and the Board will set the record date for the distribution of the preceding year's dividend once the financial report has been approved by shareholders at the Annual Shareholders' Meeting. The amount of dividends paid in the year of private placement and the amount of dividends received in the year of redemption are calculated based on the actual number of days the preferred shares are outstanding in that year.
      3. The Company has the discretion to distribute dividends on preferred shares C. If the Company has no or insufficient surplus to distribute dividends on the preferred shares C in its annual accounts, or if the distribution of dividends on the preferred shares C will cause the Company's capital adequacy ratio to

fall below the minimum requirements set by law or by the competent authorities, or if there are other necessary considerations, the Company may resolve not to distribute dividends on the preferred shares C and this shall not be viewed as an event of default. Also, the undistributed dividends or dividend shortfalls will not be accumulated and deferred in coming years.

1. 1. Preferred C shareholders shall not participate in the distribution of earnings and capital surplus in cash and capitalization of common shares, except for the dividends set forth in sub-paragraph b above. The preferred C shareholders shall have priority in the distribution of the residual assets of the Company over the common shareholders, and all preferred shareholders, irrespective of classes of shares, shall rank pari passu, provided that such distribution shall not exceed the respective issue amounts.
   2. Preferred C shareholders have no right to vote or elect, but are entitled to be elected as directors at shareholders' meeting. Preferred C shareholders have the right to vote at preferred C shareholders' meeting and at shareholders' meeting concerning the rights and obligations of preferred C shareholders.
   3. Preferred shares C shall not be converted into common shares and preferred C shareholders have no right to require the Company to redeem the preferred shares held by them.
   4. Preferred shares C have no maturity date, though the Company may redeem all or a part of the outstanding issued preferred shares at any time after seventh anniversary of the preferred shares issuance date. Unredeemed preferred shares C continue to carry rights and obligations of the issuance conditions set forth under this article. In the year of a redemption of preferred shares C, if the Company resolves to distribute dividends, dividends to be distributed up to the redemption date shall be calculated by the actual number of days of the year issued and outstanding.
   5. When the Company raises capital through issuance of new shares, preferred C shareholders have the same pre-emptive right as common shareholders for newly issued shares.
   6. In the event of dividend distribution of preferred shares C, the order of allotment shall be determined in accordance with the order of issuance of the preferred shares.
2. Privately placed securities may not be resold within three years of the delivery date except the circumstances under Article 43-8 of the Securities Exchange Act. It is proposed that three years following the date of Closing of the Company's shares through private placement, the Board of Directors be authorized to determine, in consideration of the-then situation and in accordance with the relevant regulations, whether or not to obtain a consent letter from the Taiwan Stock Exchange Corporation, to apply to the FSC for post registration of public issuance, and to

apply for listing of such shares.

1. Record date for any additional share exchange, stock swap, or subscription: NA
2. Possible dilution of equity in case of any additional share exchange, stock swap, or subscription: NA
3. For additional share exchange or subscription, possible influence of change in shareholding ratio of TWSE-listed common shares if all privately placed corporate bonds are converted and shares subscribed for (no.of TWSE -listed common shares (A), (A) / common shares issued): NA
4. Please explain any countermeasures for lower circulation in shareholding if the aforesaid estimated no.of TWSE -listed common shares does not reach 60million and the ratio does not reach 25%: NA
5. Any other matters that need to be specified: The long-term capital raising plan (including but not limited to the actual issuance price, number of shares, issuance terms, plan items, total monetary amount, implementation schedule and expected benefits etc.) will be proposed to the Annual General Shareholders' Meeting to authorize the Board and/or the Chairman to adjust, develop and execute the plan based on market conditions and relevant regulations. The Board and/or the Chairman will also be authorized to deal with relevant matters by law if the plan needs adjustment due to change of regulations, instructions from competent authorities, or any changes based on evaluation of operation strategy or objective circumstances.